News from Notch Consulting, Inc.

April 14, 2014

Tiremakers continue to invest in the United States

Filed under: Carbon Black, insoluble sulfur, Rubber Chemicals, Tire Cord, Tires — Notch @ 6:05 am

Tire Business has an overview of the current slate of tire plant expansions underway or planned for the United States. This includes major projects by Bridgestone, Continental, Hankook, Michelin, Toyo, and Yokohama. The article confirms industry rumors that Korean tiremaker Kumho Tire USA Inc. plans to restart a long-stalled project to build a new tire plant in Georgia. Notch Consulting is tracking $4.5 billion in new investment in tire capacity in the United States from 2012 through 2020.

May 29, 2012

Nokian will cut back tire production in Finland as its new Russian plant begins production

Filed under: Carbon Black, insoluble sulfur, Rubber, Rubber Chemicals, Silica, Tire Cord, Tires — Notch @ 11:06 pm

Nokian is scheduled to begin production at its new factory in Vsevolozhsk, Russia in June 2012. The factory is built alonside an existing plant. Two new production lines are scheduled to begin this year, with two more to begin production in 2013 and 2014. At that time, the plant’s annual capacity will be six million tires and the two Russian factories will have a combined annual capacity of approximately 17 million tires.

As production increases in Russia, Nokian is reducing work at its home factories. Starting in July, production at the tiremaker’s plant in Nokia will be cut back to a five day per week schedule. According to the company, the plant will continue to produce primarily for the Nordic countries. The modified production plan will lead to a cut in outsourced labour and the elimination of around 120 jobs. Nokian says a 30 million euro modernisation plan being carried out in the Nokia factory will enable it to operate with a lower workforce.

December 6, 2011

RMA lowers estimate for US tire shipments

Filed under: Carbon Black, General, insoluble sulfur, Silica, Tire Cord, Tires — Notch @ 2:53 pm

2011 TIRE SHIPMENTS TO GROW NEARLY ONE PERCENT

Two percent increase anticipated for 2012
WASHINGTON, D.C., December 2, 2011 – The Rubber Manufacturers Association lowered its 2011tire shipment forecast to 287 million total units, which represents a nearly one percent increase or approximately two million units more than 2010. This is a result of downward revisions in year-end economic growth in the U.S. economy.

For 2012, the forecast remains guardedly optimistic as U.S. economic growth is anticipated to remain slow. As such, overall tire shipments are forecasted to increase by more than two percent reaching a total of over 290 million total units. Persistently high fuel costs, a decrease in miles driven by consumers plus moderating growth in the commercial replacement tire sector have led to a restrained outlook.

RMA’s Tire Market Analysis Committee 2011 forecast for key categories include:

Original Equipment (OE) Passenger Tires: OE tire shipments were revised slightly lower to approximately 35 million units, a 5.4 percent increase over 2010, as a result of decreased vehicle production related to supply chain disruptions due to the natural disasters in both Japan and Thailand. The forecast for 2012 is for an approximate 13 percent increase, to nearly 40 million OE units, as available credit and attractive vehicle prices are expected to drive vehicle sales.

Original Equipment Light Truck (LT) Tires: This category is forecasted to experience a nearly 15 percent increase in 2011 to approximately 4.2 million units due to the shift to larger vehicles as a result of more fuel efficient pickups and improved economic conditions in commercial sectors that utilize light trucks. However, a 7 percent decrease, or approximately 300,000 units for a total of 3.9 million units, is forecasted for 2012. This is a consequence of a trend towards light trucks built on car-based platforms instead of truck-based platforms owing to increased vehicle fuel mileage standards and consumer demand.

Original Equipment Medium/Wide-Base/Heavy On-Highway Commercial Truck Tires: The forecast for commercial OE tire shipments was revised upward for 2011 to approximately 54 percent, reaching nearly five million total units. This underscores the pent up demand for commercial trucks and trailers concurrent with a predicted nearly four percent increase in the Industrial Production Index. For 2012, the forecast is for an additional nearly 10 percent increase as pent up demand offsets a slowing economy.

Replacement Passenger Tire: The forecast for this category was revised to show a decrease of approximately two percent for 2011 as vehicle miles driven have declined, energy costs remain high, and continued economic uncertainty weighs on the consumer. The decrease represents a drop of approximately four million units for 2011 with total passenger replacement units reaching approximately 196 million units. For 2012, less than one percent growth is forecasted – representing an approximate one million unit increase – as economic growth continues to remain sluggish and vehicle miles driven ticks up slightly.

Replacement Light Truck Tire: This category, represented by small commercial vehicle market – mainly “class 3” trucks, was revised downward to an approximate two percent increase in 2011 – a growth of approximately 700,000 units or nearly 29 million total units. The downward revision was primarily attributed to the slower than expected recovery in the light truck category as well as change in light truck platforms to car platforms, which began in 2008. For 2012, no further increase is anticipated as the economy is expected to remain weak.

Replacement Medium/Wide-Base/Heavy On-Highway Commercial Truck Tires: The forecast for this market will remain strong for 2011 as commercial trucking has grown concurrent with the increase in the Industrial Production Index. As such, the market is anticipated to increase by approximately 1.5 million units in 2011 to nearly 17 million units. For 2012, an additional 800,000 units are anticipated as the IPI is forecasted to continue to grow by over two percent.

September 19, 2011

Bekaert celebrates expansion of its tire cord plant in Russia

Filed under: Tire Cord — Notch @ 12:28 pm

In a September 15 press release, Bekaert celebrated its plant expansion in Lipetsk, Russia. Bekaert Lipetsk manufactures steel cord products for the Russia and CIS tire industries. The expansion includes construction of a new facility covering 13,000 square meters along with associated infrastructure and state-of-the-art machinery. No production volume specifications were included in the press release.

September 11, 2011

Are We Facing a Tire Shortage?

Filed under: Carbon Black, General, Rubber Chemicals, Silica, Tire Cord, Tires — Notch @ 8:40 pm

Asks Tire Review.

According to an official statement Bridgestone released to the Nikkei, the company is expected to face a shortage of an estimated 500,000 tires this year, roughly 5% of domestic OEM orders received.

The regulatory filing went on to explain that Bridgestone’s seven domestic plants making passenger car tires are “operating around the clock and have no room to raise output.” Bringing in tires is the obvious option, but “procuring tires from plants overseas appears to be difficult due to strong demand there,” the Nikkei report said.

However, not all indicators are positive, and there are some potential dark clouds on the horizon. In particular, analysts noted that Bridgestone indicated that it did not plan to raise tire prices further to counter higher raw material costs.

Morgan Stanley’s concurred with this analysis and even put it a grade stronger. These comments “appear in sharp contradiction” the bankers said in an investor’s note published Sept. 5, adding: “high demand and low capacity are usually the perfect environment to raise tire prices – this is what the tire industry has consistently done in the last 12 months.”

Their view, based on comments from peers in the tire industry, is that it is becoming clear that volumes are softening in the developed markets. “Hence, one potential explanation for the slightly odd statement above may simply be that we have a combination of growing capacity, softening demand and lower raw material costs,” the analysts surmised, with a warning: “If companies shift towards market share gain rather than price discipline we could see considerable more pricing pressure in 2012.”

August 30, 2011

Xingda proceeds with plans to build new tire cord factory despite recent lower profits

Filed under: Tire Cord — Notch @ 8:22 am

Xingda International Holdings Limited, a Chinese producer of steelcord for tires and other products, saw lower profits on increased sales for the six months of 2011. Construction of the Group’s No. 9 factory has continued according to schedule. Xingda also intends to build a new factory in China’s Shandong Province with a planned production capacity of 100,000 tons for radial tire cord, much of which will be used to manufacture truck tire cord. Construction of the Shandong factory is to be in parallel with the expansion of No. 9 factory. The total production capacity for radial tire cord of the Group will then exceed 600,000 tons by 2012, reaching 700,000 tons by 2013.


July 21, 2011

Bridgestone to invest $135 million in the US

Bridgestone Americas Tire Operations will invest $135 million to expand capacity at its passenger and light truck tire plant in Aiken County, South Carolina by up to 4,750 units per day. Construction is expected to be complete by the first quarter of 2013 and production is expected to begin in 2Q 2013.

The project will increase plant capacity by an additional 4,750 units per day to about 29,750 units per day. Bridgestone Americas said it will expand the facility by 266,000 square feet in the main plant and mixing areas.

July 5, 2011

Conti announces new tire plant in Russia

On July 1, 2011, Continental announced plans to build a new tire plant in Kaluga, Russia. Kaluga is a city of just over 325,000 inhabitants that lies 170 km southwest of Moscow.

Nikolai Setzer, head of the Passenger and Light Truck Tires division and member of the Executive Board of Continental AG stated in that Conti planned to invest a total of more than one billion euros over the next four years in order to build up additional passenger tire capacity. The site in Kaluga was chosen for its good infrastructure, central geographical location, and the good experience Continental has already had with the existing automotive electronics plant in the location.

Some €220 million will be invested in the new plant, with production slated to start at the end of 2013. Capacity will total about 4 million tires per year in its first full capacity phase, while employment will total about 400 by the end of 2013. The Russian government has promised to support the new site. Continental, as a major tyre producer serving the European OEMs, is thus following leading vehicle manufacturers like Volkswagen, for example, who have already had manufacturing operations in Kaluga for several years now. Construction will begin at the end of 2011.

The full press release is here.

May 31, 2011

Japanese car production fell 60% in April

JAMA (Japan Automobile Manufacturers Association, Inc.) have released their latest production figures for Japanese automobile production, which provide a picture of the effect of the 2011 Tōhoku earthquake and tsunami that struck the northeast coast of Japan on March 11.

Passenger car production in April was down 60.2% from the same month last year, while truck production was down 57.5% compared to April 2010 and bus production was down 80%. Total Japanese automobile production in April 2011 was 292,001 units, including 249,772 passenger cars, 40,305 trucks, and 1,924 buses.

Domestic sales of automobiles fared slightly better, with passenger car sales down 48.5%, truck sales down 40.4%, and bus sales down 53.7%.

On a monthly basis, Japanese automobile production was down 38% in April 2011 compared to March 2011, when production totaled 404,039 units. Passenger car production was down 28% in April 2011 compared to March 2011, while truck production was down 21% and bus production was down 59%.

Full figures available here.

May 15, 2011

Conti Expanding Mount Vernon, Building New Plant in Russia

Filed under: Carbon Black, General, Rubber Chemicals, Tire Cord, Tires — Notch @ 10:33 pm

On Thursday, May 12, Continental Tire the Americas L.L.C. announced plans to invest $224 million to expand its tire plant in Mount Vernon, Illinois, a project that will add 444 new full-time jobs at the plant. The project, which brings Conti’s total investment in the plant since 2006 to $486 million, will result in a significant increase in tire-producing capacity of nearly 4 million additional passenger and light truck tires annually. About $171 million of the planned investment will be used for new machinery and equipment, while the remaining $53 million will be directed at infrastructure upgrades.

Here is the press release.

According to Rubber & Plastics News (subscription required), in addition to expansion of passenger and light truck tire capacity, Conti’s commercial vehicle tire division will increase capacity at Mount Vernon by 15% by December 2012, bringing annual capacity to 3.15 million tires per year. The first 5% increase has already been achieved, according to Conti.

In addition to the the Illinois expansion, European Rubber Journal reports that Continental also plans to build a new car tyre plant in Russia. The company reportedly will choose a site by the end of June for a plant expected to be operational by the end of 2013. The plant would have capacity for 4 million units annually and represents an investment of around euro 200 million over the four-year period.

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